Rosa Luxemburg – her

contributions to political economyMichael R. Krätke Lancaster University

Institute for Advanced Studies International Institute for Social

History

What Rosa Luxemburg was … and what she was notRosa Luxemburg was a Marxist, not a Feminist!

Rosa Luxemburg was an economist, not a philosopher!

Rosa Luxemburg was a political activist, but also a teacher and a scholar!

Marx’ political economy was meant to be a critique of capitalism – and

of economic thought / economic theories Rosa Luxemburg – as all Marxists of the classical period – was of course

aware of the concept of commodity fetishism / money fetishism Marx had not finished the job - “Capital” is still incomplete, a work in

progress broken off In “Capital”, Marx has left several (crucial) problems unsolved – among

them the problem of accumulation (accelerated accumulation) What is Marx’ theory about: it is a “Theory of Capitalist Development”

(from the “laws of motion” to the “laws of development and change”) What is Marx’ theory about: a theory of the capitalist world economy Why is there stagnation in the Marxist camp? When will the Marxists

have to work on the unsettled questions of Marx’ critique of political economy?

How Rosa Luxemburg read Marx

Political Economy was a science still in the

making! Political Economy was far more than just the theory

of capitalism / or the theory of market economies! Political Economy was not Economics! Political Economy was not be subdivided in the

conventional way (in pure theory / applied theory) Political Economy was a social, political and

historical science – dealing with a social, political and historical subject

Political Economy should deal with the World Economy, not National economy(ies)!

How Rosa Luxemburg saw political economy

The core problem of political economy How is a capitalist economy possible?

When, how and why does a capitalist economy become impossible?

Marx’ great thesis: capitalist economies create self-destructive tendencies, undermining their own prerequisites!

Rosa Luxemburg’s major contributions Her doctoral dissertation on the “industrial development of Poland” Her journalism Her polemics ( Social Reform / Mass strike / Junius) Her “great work” – the “Accumulation of Capital” Her unfinished “Introduction to political economy” Her “Anti-Critique”

Origin: Rosa Luxemburg’s efforts to reformulate the “historical

tendencies of capitalist accumulation” (the last chapter of her textbook)

Following the example of Alexandr Bogdanov’s textbook (the history and logic of capital accumulation)

Combining macroeconomic analysis (even modelling) (section I), the history of economic thought (section II), the explanation of imperialism in general (causal link between capital accumulation and capitalist expansion on a world scale) (section III)

Further element (the best part of the book): the analysis of the methods and practices of imperialism - how the development of capitalism is enforced by the great capitalist powers onto non-capitalist regions / countries

It is not a theory of the “collapse” or “breakdown” of capitalism

The “Accumulation of Capital” of 1913

The debate on imperialism – and

Rosa Luxemburg’s silence

Rudolf Hilferding – and “Finance Capital” (1910)

Otto Bauer and the “Question of Nationalities” (1907)

The Tugan-Baranowsky debate – a debate on

crisis and growth (1901e.s.) The debate on international money and inflation

(1909 e.s.) (the first Marxist debate on monetary theory)

The debate on “revisionism” – actually a debate about the prospects of capitalist development in the advanced capitalist countries after the first Great Depression (1896 e.s.)

The debate on “imperialism” and the rise of “finance capital” (1898 e.s.)

Further Debates

Critics on all sides: Kautsky, Bauer, Eckstein, Pannekoek, Lenin, Conrad Schmidt, Sam de Wolff

Major criticism: The solution to the problem is already there – in Marx’s outline of the scheme of expanded reproduction

Pannekoek, Eckstein and others: Even her analysis of imperialism is wrong or inadequate

Methodological critique: Models are not analyses of real processes in historical time

The Luxemburg debate – the Attacks

The Anti-Critique – too late (written in 1915,

published in 1921) A strong polemic (rather unfair) – theoretically

weak, confusing issues (theory accumulation, theory of crisis, theory of business cycles, theory of capitalist development)

Rosa Luxemburg refuses modelling and confuses theoretical analysis and historical explanation

However: the debate goes on – thanks to the fight against “Luxemburgism” / thanks to the first (and only) Luxemburgist political economist – Fritz Sternberg

Rosa Luxemburg’s counter – attack

Rosa Luxemburg’s critique of Marx – thoroughly refuted!

Marxist Macro-economics: The dynamics of the capitalist accumulation (in a purely capitalist world) have been clarified

Marxist Theory of Crises has been advanced to an unpredented level of sophistication (during the 1930s)

Some unsettled questions of Marxian political economy have been (re)discovered and tackled

Capitalism and its Futures – A post-colonial capitalist world economy and an “imperialism” in new guises

The Luxemburg debate – results

Some stronger points: How the making of external markets worked (before 1914)

Destruction of “natural” (non-market, subsistence) economies Destruction of agrarian village economies and their markets Integration of occupied / annexed territories and peoples into the “national economy” of the colonial “motherland” International and domestic debt (imposed with the help of taxation) Militarism (permanent war economy Also in the colonies (standing colonial armies) Fazit: A very peculiar historical form of capitalist expansion !

Rosa Luxemburg: the limits of capitalism are

different from the “limits of capital” – internal and external limits of the capitalist mode of production

Rosa Luxemburg’s conventional thinking: three phases in the history of capitalism – early, mature and late capitalism (rise and fall) – organic analogy

The problem of the limits: What happens when capitalism is approaching them?

The problem of unequal development of different kinds and types of capitalism (Marx saw it clearly in the 1870s)

The Limits of Capitalism

Imperialism in Luxemburg’s times was different: the end of

“free trade”, the rise of the gold standard, the increase of rivalries between old and new industrial powers, the rise of NACs, the decline of the Pentarchy

New “empires”, different from the colonial empires of the 17th and 18th century: extensions of the homeland – transnational “national states”

The rise of “high finance” - the change of banking and financial transactions, the rise of transnational financial markets (with London as global hub, the £ as international reserve currency)

A fragmented world trade (colonial trade / inter- and intra-industry trade)

Expropriation of land and resources – plus foreign direct investment (because dispossession is not accumulation)

The peculiarities of “imperialism” then and now

Post-colonial times - true, but trivial Large (continental / transcontinental) free

trade zones (plus varieties of BTAs as their environment)

Hierarchy of rivalling international currencies (reserve currencies) - $ as “ money of world trade and world finance”

Transnational commodity chains / transnational value (production) chains

TNCs and MNCs (modification of international value, modifications of national and international rates of profit)

How Accumulation on a World Scale works today

Integration of International Financial Markets

(but still a clear Hierarchy) A world market for firms (buying and selling

capitalist corporations) – and a world market for land ( real estate) and resources

New forms of associated / integrated “Finance Capital”

Rising levels of indebtedness – transnational debt chains ( hinging upon US Treasury Bonds)

“Global governance” by great powers and gentlemen’s clubs

How Accumulation on a World Scale works today II

Marx was wrong: Only a part of the wealth of capitalist

nations consists of commodities! Transformation of previous non-commodities (public goods,

commons, products of subsistence labour, blocked exchanges / excluded goods and services) into commodities

Transformation of non-capitalist commodities into capitalist commodities

Transformation of luxuries into commodities of mass consumption

Transformation of leisure activities, family, community activities into commodities (paid services)

Credit and debt (creating and expanding effective demand for the non- or less propertied classes) is a crucial instrument

How capitalist expansion works – domestically

The Relevance of Rosa Luxemburg for a Revival of Political Economy A Revival is necessary

A Revival of that noble science of political economy is possible

Not without Marx and some enlightened Marxists

The revival is already in the making

But: it is a revival of political economy as an Interdiscipline! But: it is not feasible without another “critique of political economy”